GREEN4SEA: What are your thoughts on industry’s decisions regarding emissions cuts? How IMO’s decisions at MEPC71 on shipping emissions affect the current legislative landscape?
Alexis Rodriguez: Recently, many regulations have been put into effect to reduce the international shipping industry’s impact on the environment by reducing greenhouse gas (GHG) emissions, beginning with stricter technical, operational, design and fuel requirements. Currently, the industry is focused on the International Maritime Organization’s (IMO) strategy to reduce emissions, which will be finalized in mid-2018.
At the Marine Environmental Protection Committee’s 71st session this year from July 3-7, the Committee approved the draft outline of the IMO’s strategy, which was prepared by the Intersessional Working Group on the Reduction of GHG Emissions from Ships.
I believe it’s too early to discuss how the strategy will impact the current legislative landscape until the IMO strategy is finalized and presented at MEPC 72. First, it’s necessary to come to a consensus on the strategy’s guiding principles, levels of ambitions, as well as the additional regulations incorporated.
G4S: In your opinion, what do you think could be done further from a regulatory point of view at UN level to accelerate progress on the environmental footprint of shipping?
A.R.: There are various regulatory frameworks set by the United Nations (UN) that help reduce the shipping industry’s environmental footprint in addition to the IMO. For example, the UN sets international standards with their sustainable development goals and holds annual meetings such as the Oceans Conference to encourage stakeholders to reduce their impact on the world’s oceans. Additionally, the UN Framework Convention on Climate Change facilitated the Paris Agreement in 2015 that more than 195 members have already signed on to. However, we can’t measure the shipping industry’s acceleration of progress until the IMO strategy is published next year.
G4S: What could be the biggest challenges for the pathway to zero-emission shipping? Which are Panama Canal’s plans towards that end?
A.R.: The biggest challenge regarding zero emissions shipping is that any regulation or measure adopted by the international shipping community without a clear objective could affect international trade in a possibly unforeseen way. In order to move towards a truly sustainable future, everyone within the industry must be fully involved and on board, including ports, transport authorities and shippers, among others.
Since opening in 1914, the Panama Canal’s strategic geographic location has enabled vessels to shorten the distance and duration of their voyages compared to alternate routes, thus reducing costs and GHG emissions. The Panama Canal, otherwise known as the Green Route, is estimated to have saved more than 670 million tons of carbon dioxide over the course of its history. We also have a number of green initiatives in place to reduce the environmental impact of its operation and to reward customers who meet high environmental efficiency standards.
G4S: Which green initiatives has the Panama Canal adopted for a more sustainable future?
Green Connection Environmental Recognition Program
As part of its commitment to sustainability, we launched the Green Connection Environmental Recognition Program to recognize customers who demonstrate excellent environmental stewardship and encourage others to implement technologies and standards that reduce emissions. The program consists of two initiatives: The Environmental Premium Ranking and the Green Connection Award. Thus far, more than 85 vessels have received a Green Connection Award and more than 275 vessels have qualified for the Environmental Premium Ranking since its implementation in January 2017.
Watershed Community Efforts
To sustain natural resources and promote conservation of the Panama Canal Watershed, the Panama Canal has delivered nearly 10,000 land titles over the past three to four years to its inhabitants, and works with local communities in several reforestation, environmental education and economic incentive programs to improve their quality of life.
The Expanded Panama Canal features 18 state-of-the-art water-savings basins, each with the surface area of 25 Olympic-size swimming pools, so the Neopanamax Locks can reuse 60 percent of the water per transit and use 7 percent less water in total than the Panamax Locks.
G4S: Do you have any new projects on the pipeline and/or plans that you would like to share with the rest of the industry?
A.R.: Yes, we have many projects in the works, largely aimed at providing greater connectivity and transshipment opportunities to the region. Specifically, we have plans to concession a roll-on roll-off (RoRo) terminal to serve as a center for the redistribution of vehicles, machinery and heavy equipment; a 1,200-hectares logistics park to further strengthen the logistics services in the region; an LNG terminal on the Atlantic side of the waterway to provide LNG bunkering and redistribution capabilities; and we will continue to advance plans for the Corozal Container Terminal. Ultimately, our goals are to both diversify our services and advance our role in strengthening Panama. The Expansion of the Canal was a big step in our history, however we are always looking for opportunities to enable Panama as the logistics hub for the Americas through new and innovative projects.
G4S: Which are the most promising energy sources for the industry? In which way Panama Canal supports renewable energy?
A.R.: With the implementation of the 2020 Sulphur cap in October 2016, energy commodities are shifting. Demand for liquefied natural gas (LNG), liquefied petroleum gas (LPG) biofuels and methanol is on the rise, however, refineries are preparing to increase their supply of low sulfur fuel to comply with the new regulation.
In support of renewable energy, the Panama Canal installed a floating solar panel park pilot program on Miraflores Lake—the first of its kind in Latin America. The solar panels have 20 kilowatts of peak capacity and cover 400 square meters of water that would normally go unused. This innovative initiative seeks to increase the Canal's renewable energy input and reduce the use of fossil fuels and emissions that contribute to global warming.
G4S: After one year of the expanded Panama Canal opening, could you briefly provide us an overview of its environmental performance?
A.R.: The Expanded Panama Canal, which recently reached the one-year anniversary of its opening, lessens shippers’ environmental impact. In addition to providing the same shorter route, the Expanded Canal's wider, longer and deeper lane has allowed more than 1,500 Neopanamax vessels to transit the past year, providing greater cargo carrying capacity and requiring less cargo movements, thereby reducing costs, fuel consumption and emissions.
In its first 12 months of operation, the Expanded Canal contributed to a reduction of more than 17 million tons of carbon dioxide, and combined with the Panamax Locks, more than 35 million tons were reduced.
G4S: Is it true that expanded Canal sees new market segment in LNG? What are your expectations?
A.R.: Since the Expanded Canal can now accommodate 90 percent of the global LNG fleet and reduce voyage times, LNG vessels traveling from the U.S. East Coast to Asia have transited the Expanded Canal at a rate of 5.2 vessels on average per week, surpassing our forecast of one weekly transit. In the Expanded Canal’s first year of operation, the new LNG segment represented 9.1 percent of transits, which is set to increase with an anticipated uptick in U.S. LNG exports by 2018. By 2021, we expect the number of LNG carriers transiting the Expanded Canal could average one per day.
G4S: What is your key message to industry with respect to Panama Canal’s contribution to greener shipping? What are you goals & aspiration in the long term?
A.R.: Over the last 102 years, the Canal has directly contributed to the reduction of 650 million tons of CO2 emissions. We will continue fostering emissions reductions, promoting the IMO’s efforts and adopting innovative and renewable technologies through the following long-term goals:
- Conduct studies on energy efficiency, fuel substitution and renewable energy measures in adherence to the new IMO regulations and strategy.
- Determine a portfolio optimization strategy for commercializing our 378,000 carbon credits generated from the Canal’s reforestation projects.
- Continue to implement emissions reducing incentives with priority given to energy efficient vessels.
The views presented hereabove are only those of the author and not necessarily those of GREEN4SEA and are for information sharing and discussion purposes only.
Alexis Rodriguez is the Panama Canal’s Environmental Protection Specialist. The Panama Canal is run by an autonomous agency of the Government of Panama in charge of managing, operating and maintaining the Panama Canal. The operation of the Panama Canal Authority (ACP) is based on its organic law and the regulations approved by its Board of Directors. For more information, please refer to the ACP’s website:http://www.pancanal.com o